Entities supervised by the superintendency of security market (SMV) are required to mandatory have a board of directors and independent directors; to clearly define functions of the board of directors and the management; to comply with other regulations of the corporate governance; and to implement a website
Pursuant to SMV Order No. 020-2019-SMV/01 (“Order”), it is set forth to amend the “Regulations on incorporation of entities requiring authorization by SMV” passed by SMV Order No. 039-2016-SMV/01, whereby it is hereinafter renamed as “Common regulations on entities requiring authorization of incorporation and operating license by SMV”. It provides that the entities supervised by the Superintendency of Security Market (SMV) thereunder (“Entities”) shall comply with new requirements in matters of corporate governance, and implement a corporate website with the minimum content required.
Below the most relevant aspects of this amendment are described as follows:
In matters of corporate governance in Entities
A mandatory Board of Directors
This Order compels each Entity to have a Board of Directors, including those under a closely held corporation.
In addition, the Order sets forth specific functions and responsibilities that may have the Entities’ Board of Directors, notwithstanding those being applicable by law.
Regulation of the Board of Directors
The Order provides that the Entities shall have a Regulation of the Board of Directors; this shall include the minimum aspects being provided for thereby; and this shall be available to the SMV whenever it is requested thereby.
The Order provides that said regulation shall be of a binding nature and any breach thereof will give rise to liabilities of the Entity and of its Board of Directors.
Mandatory Independent Directors
Entities are obliged to have Independent Directors who comply with the provisions set forth in the “Guidelines for Independent Directors Qualification” passed by SMV Order No. 016-2019-SMV/01 (“Guidelines”) in this year.
Moreover, the Order sets forth a formula to determine the number of Independent Directors to be required for each Entity. The appointment or change of Independent Director shall be informed to the SMV.
Functions of the Board of Directors
The Order provides for certain principles that Entities must comply with, whereby the Board of Directors shall properly fulfill its functions.
It should be mentioned that the Order establishes the liability of the Board of Directors to evaluate on a regular and objective basis, at least once a year, its performance as authority body and such of their members. This shall be recorded in a report or document to be available to the SMV whenever it is requested thereby.
Defining managerial and governing functions
The Order compels each Entity to have a clear policy of defining managerial and governing functions performed by the Board of Directors, as well as the regular management by the General Manager and other managers. The most relevant policy is the prohibition to appoint the same person to the position of General Manager and President of the Board of Directors.
In matters of transparency
Corporate Website
The Order provides that each Entity having been granted an operating license by the SMV shall implement a corporate website, whereon the minimum information being set forth therein must be published as well as the additional characteristics provided for by this Order.
Finally, the Order sets forth the terms within the aforementioned requirements shall be complied therewith.
